Along with those killed in the Boston Marathon bombing, the numbers tossed around of how many will lose limbs are in the dozens. It’s tragic enough when veterans return from foreign wars with limbs missing. But, as Iraqis, Afghans, not to mention Cambodians, know, limbs lost on one’s home soil only add insult to injury.

If the Boston Marathon bombing is the result of an attack by a nation’s own citizens, it reflects poorly on that nation’s security and its civil society. If it’s the result of an attack by foreign extremists, we’re enraged by the harm that comes to innocents and humiliated that our security has been breached. If 9/11 has any small favor to thank goodness for, it’s that the lethality of its component incidents left us without many walking wounded to inflame the wound and rub our face in the security failures.

Should the Boston Marathon bombing be the work of foreign extremists, much as I personally am enraged by thought of their supporters celebrating, we need to be on guard against hate crimes and refrain from profiling. Nor should we surrender to the fear that engulfed us after 9/11 and enact yet more layers of security and measures that further limit civil liberties. Whereas those responses are on the back end — the reactive and defensive — we need to respond with the leading edge: foreign policy.

Should the suspects prove to be from the Middle East, retaliatory drone strikes or JSOC attacks will only add fuel to the fire. Meanwhile, the immediate aftermath of a tragedy is no time to interject commentary that even hints at blaming the victim. But our first line of defense is acknowledging that U.S. policies — such as stationing forces on Arab soil, failing to pressure Israel to halt their oppression of Palestinians, invading Iraq invasion, and unleashing drone attacks on Afghanistan, Pakistan, Somalia and Yemen — stoke fires and create enemies.

Ultimately, our best defense is not a good offense: it’s keeping the number of people we need to defend ourselves against to a minimum.

Faced with a deepening socio-economic crisis that has only intensified since the collapse of the Ben Ali government in January, 2011, it appears more than likely that Tunisia is about to enter into a major agreement with the International Monetary Fund (IMF) for a $1.7 billion loan. As is almost always the case, the loan is conditionally based upon Tunisia fulfilling what the IMF calls structural adjustment criteria, a part of which has already been implemented – eliminating the subsidies on fuel which has increased their cost.

All this is being done in the classic IMF fashion with as little public discussion as possible either with the Tunisian government – its Constituent Assembly – or with civil society, which have had no input whatsoever into the process. For an international organization that talks the talk about ‘transparency’. its long held traditions of secrecy, especially where it concerns granting sizable loans to semi-peripheral and peripheral countries, is much more the norm.

That said, in this new post-Ben Ali era, confused and directionless as it is economically and politically, one thing that the Tunisian people have won is their freedom of speech. As a result, alas (for IMF, Tunisian Central Bank and Finance Ministry bureacrats), it has been more difficult to hide the details and conditions for this loan than in the past. A growing number of Tunisia’s talented political and economic researchers have been able to break through the traditional wall of silence to unearth the details of the loan and press the Tunisian government to do what it really seems to want to avoid – engage in a public, wide-ranging discussion on the loan itself, and more basically, on the direction of the economy itself.

Many of the revelations about the loans have appeared in Arabic, French and English at the Tunisian alternative media website, Nawaat.org, which has broken key elements of the story to the Tunisian public, enough so that government has been pressed to publicly respond. It is precisely this kind of discussion which has been missing from the Tunisian public since the Ennahda-led government came to power in the October, 2011 elections.

During the Ben Ali years in power (1987-2011), Tunisia was often cited as an IMF poster-child, i.e., IMF structural adjustment might have caused ‘problems’ elsewhere – but in Tunisia, at least according to IMF publicity, it seemed to be working. This particular illusion was blown to bits so to speak by the emergence of the massive social movement that brought down the Ben Ali government. When the mask was ripped off, it turns out that not only had IMF structural adjustment policies not helped Tunisia, they were a major contributor to the country’s socio-economic crisis. IMF statistics on Tunisia were, if not entirely fabricated, way off.

The rosy picture the IMF painted of the Tunisian economy was more hype than truth. In fact the policies failed. How interesting and typical that within the IMF there has virtually been no self-criticism for how it contributed to Tunisia’s economic crisis, as if structural adjustment had nothing to do with Ben Ali’s collapse. Worse – the policies continue. The proposed loan follows closely in the footsteps of those that came before. There is no change in the country’s post-Ben Ali economic policies from those that existed prior to his downfall.

If this hypothesis is accurate and, from everything I can tell, it is, there are consequences. As the last uprising was essentially caused by Tunisia’s embracing of neoliberal economic policies and nothing, or precisely little, has changed. Another major crisis cannot be that far off. History strongly suggests the relationship between neoliberal economic policies and political repression ‘go together like a horse and carriage’ as the lines from an old song go.

Nor has Ben Ali’s extensive repressive apparatus been dismantled; it remains largely intact, for awhile in cryonic suspension, but now coming back to life again. Having tasted the wine of freedom and empowerment – the fruit of unprecedented peaceful mass protest – it is unlikely that the Tunisian people will wait this time another quarter century before taking measures into their own hands once again. I do not write these words as some kind of ‘threat’, simply from my reading of history.

In any case, what follows is the first part of a three- (or maybe four-) part series. This first part looks at the Tunisia’s initial uneasy relationship with the IMF in the 1980s, Bourguiba’s resistance to the policies, and Ben Ali’s embrace of structural adjustment. Part Two will examine the results of Ben Ali’s neoliberal policies on Tunisia (1987-2011) and Part Three will take a peek at the current proposal, well on its way to being implemented. RJP)

Tunisia’s Baguette Revolution

For ‘outsiders’ the photo seems admittedly a little odd: a man armed with a ‘baguette,’ [i] as if it were a machine gun and not simply baked flour, pointing it at a Tunisian security force down the street on Ave. Habib Bourguiba. But Tunisians of any age understand it. The photo is from early January 2011, just before a million person march on Tunis forced the five-star kleptomaniacs, Tunisian President Zine Ben Ali and his wife Leila Trabelsi, from power.

The foreign media, including here in the USA, suggested that Tunisia’s January 2011 uprising was a ‘Twitter’ or ‘Facebook’ Revolution, but it was much more basic than that – it was about bread and roses ­– about pervasive economic stagnation, high unemployment, low wages and seething repression. At the time, no one was talking about whether women should wear veils or bare their tits, or thought the uprising was about trashing marabouts and trade union headquarters, or desecrating Jewish cemeteries.

Taking their cue from the poor man[ii] facing down Ben Ali’s security apparatus, hundreds of Tunisians picked up their baguettes and took to the streets. Symbolizing the failure of the Ben Ali years, the baguette was also reminder of the Bread Riots of 1984 which shook the country to its foundations, leading to a full scale national revolt that very nearly brought down what was then the 18-year rule of the country’s first president, Habib Bourguiba.

Tunisia Caught in the Global Crisis of the 1980s

True, the 1984 Tunisian economy was in the doldrums, although the current fashion – to blame the slowdown on the Tunisian economic model of state capitalism, with its strong social contract – misses the point.[iii] The global economy had been in the doldrums for a decade hitting the commodity, low-end manufacturing sector in the semi-periphery and periphery with a special vengeance in the early 1980s. Tunisia was caught up in the storm. In particular, the European economy, had gone through a decade of recession and high unemployment which, in turn, had a profound impact on Tunisia, as so much of the Tunisian economy was geared towards exporting to Europe (France and Italy in particular) and welcoming European tourists.

In the early 1980s, Tunisia’s economic situation deteriorated, the state’s tax base shrank. With some hesitation, the Bourguiba government was pressured to do what so many other Third World countries had to do at the same time: go begging to the IMF or World Bank for a loan. This Bourguiba did, and the IMF, being accommodating, agreed to offer Tunisia a substantial loan. But there were conditions: the usual structural adjustment conditions which have done so much over the years to widen the gap between poor and rich countries, to undermine and destroy the economic potential of many of the Asian, African and Latin American countries that accepted the deal.

Bourguiba Agrees to End Bread Subsidies; the Nation Rises in Protest; Bourguiba Withdraws the Proposal

These conditions included cutting government spending, reducing or eliminating capital controls and protective tariffs, depreciating the dinar (Tunisia’s currency). Part of the deal necessitated the Tunisian government ending its subsidies on wheat and semolina (ingredients in bread). Caught in the vice, Bourguiba agreed.

Such bread riots were not unique to Tunisia. They took place all over the Third World in the 1980s as the world’s poorer countries were forced to lift subsidies on food, medicine, and education, to freeze public sector wages and benefits in exchange for World Bank/IMF loans.

The government survived the crisis, although it was the beginning of the end of Bourguiba. Bourguiba’s successes were based upon a strong state participation in the economy, free public education, democratization of the role of women, and subsidies for basic food stuffs and fuel. As the tax base of the state eroded and the state fiscal crisis deepened, the social contract that Bourguiba had committed to for thirty years weakened and with it, the social base of his government narrowed.

Increased repression, especially against the country’s growing Islamicist movement (which itself was able to take advantage of the growing economic crisis) only narrowed Bourguiba’s support base that much further. On November 7, 1978, Habib Bourguiba was removed from power in a ‘palace coup’ on November. There was very little protest. Bourguiba was unceremoniously pushed aside with his former interior minister, the same man who had crushed the 1984 bread riots, Zine Ben Ali, took the helm.

In a matter of weeks, the new government’s attitude towards the World Bank and International Monetary Fund shifted from hostility and suspicion to a warm embrace. Using an old basketball trick – faking to the left, while moving with the speed of light to the right. At the beginning of his rule, Ben Ali promised openness and democracy. He gave Tunisia a quarter of a century of IMF structural adjustment and an increasingly repressive government, much crueler and all-embracing than anything Bourguiba had constructed. He went far to deconstruct much of the social edifice that Bourguiba had tried to build and would have done more had he had the opportunity. When finally chased from power in 2011, he left a country economically and socially polarized, half of the economy in the hands of the two ruling families (the Ben Alis and the Trabelsis), a repressive apparatus of more than 200,000 in a country of ten million, and an enormous debt burden. As is virtually universally acknowledged, much of Tunisia’s economic and social decay of the Ben Ali years lays at the door step of the International Monetary Fund.

Even before consolidating his hold on power, as one of his first acts, Ben Ali gave Washington a call and opened negotiations with the IMF for exactly the kind of structural adjustment-based loan Bourguiba had resisted.

Thus wrote Canadian political scientist Michel Chossodovsky:

Barely a few months following Ben Ali’s installment as the country’s president, a major agreement was signed with the IMF. An agreement had also been reached with Brussels pertaining to the establishment of a free trade regime with the EU. A massive privatization program under the supervision of the IMF-World Bank was also launched. With hourly wages on the order of €.75 an hour, Tunisia had also become a cheap labor haven for the European Union.[v]

In retrospect, the implementation of Ben Ali’s economic program was a classic example of what later Naomi’s Klein would refer to as the ‘Shock Doctrine’ to the Tunisian realities. In the Ben Ali case, a political coup – that by the way included the promise of greater democracy – became the pretext for a far-reaching economic restructuring of the economy. It included classic structural adjustment themes: reducing the state sector in the economy, lifting subsidies, ‘loosening’ the social contract, weakening the country’s education and healthcare system, keeping wages low, lifting capital controls, privatization of state resources, etc., etc. – all the policies that have made IMF structural adjustment the antithesis of Third World development over the past thirty years. It all happened quickly before the Tunisian public understood the degree to which their lives were about to be changed.

It was not only that subsidies would be ended and much of the country’s state-owned economic structures be privatized, the country’s entire economic model that had existed since independence was dismantled in the process. The ‘old authoritarian’ economic model instituted by Bourguiba that included state involvement in the economy, a social contract that included subsidies on basic needs, free quality education and a somewhat protectionist approach to foreign investment and involvement in the country’s affairs, came unglued. In its place ‘a new authoritarian’ model based upon classic neoliberal economic principles was immediately and aggressively implemented before the Tunisian people could fathom what was going on.[vi]

________________________

[i] A ‘baguette’ – a French long, thin loaf of bread; although Tunisians use the same term, they have fashioned their baguettes a little differently than the French versions.

[ii] Hard to tell, but from the picture he certainly doesn’t look like a Tunisian billionaire or high-tech yuppie, just a ‘pauvre type’ …like so many others in Tunisia.

[iii] That model was about to be dismantled; the main work was done by Zine Ben Ali once he came to power

It’s unbelievable what people would do to be in power. I know: It happens everywhere. I can’t believe that normal people in their right mind would run for elected position. There has to be something wrong in their value system to go through what they have to go through. What I saw here was much worse: so much humiliation to run for office.– Vihar Krastev

Germany apparently remains eternally wounded, dependent upon the healing power of remembrance. Germans must live with their trauma and occasionally reopen the wound to prevent it from festering. … “History or, to be more precise, the history we Germans have repeatedly mucked up, is a clogged toilet. We flush and flush, but the shit keeps rising,” Günter Grass concluded in his 2002 novel “Crabwalk.”

From Marijuana and Heroin in Vietnam to Anti-psychotic Drugs in Afghanistan

… there has been a giant, 682 percent increase in the number of psychoactive drugs — antipsychotics, sedatives, stimulants and mood stabilizers — prescribed to our troops between 2005 and 2011. … The data suggest that military doctors may prescribe psychoactive drugs for off-label use as sedatives, possibly so as to enable soldiers to function better in stressful combat situations.

Iron Lady Surpasses Hitchens’s Record for Most Disrespectful Obituaries of a Brit

… when I was a child she was just a strict woman telling everyone off and selling everything off. I didn’t know what to think of this fearsome woman. … It always irks when rightwing folk demonstrate in a familial or exclusive setting the values that they deny in a broader social context. They’re happy to share big windfall bonuses with their cronies, they’ll stick up for deposed dictator chums when they’re down on their luck, they’ll find opportunities in business for people they care about. I hope I’m not being reductive but it seems Thatcher’s time in power was solely spent diminishing the resources of those who had least for the advancement of those who had most.

[American ambassador to Pakistan Cameron] Munter was reporting daily back to Washington about the negative impact of the armed-drone campaign and about how the C.I.A. seemed to be conducting a war in a vacuum, oblivious to the ramifications that the drone strikes were having on American relations with Pakistan’s government.

IPS joined other members of the U.S. Robin Hood Tax campaign in Washington DC, where officials from the finance and climate ministries of select developed countries met to discuss how to mobilize private sector investment in developing countries to address climate change. Chanting, “Human need, not corporate greed! Robin Hood Tax now!” protesters dressed as polar bears, farmers, and bankers engaged with officials entering the meeting to urge them to support a Robin Hood Tax.

This demonstration drew attention to the fact that trillions of dollars of public money have been spent to bail out Wall Street while government officials pay short shrift to untapped and extremely promising innovative sources of public money like a Robin Hood Tax. In doing so, officials risk putting corporate profits over the needs of climate-impacted people.

Both the financial crisis and the recession have left a massive hole in public finances, threatening job creation, community services, and the ability to address climate change. While Wall Street has already bounced back, ordinary people are still trying to recover from problems caused by corporate abuse in the financial sector. The Robin Hood Tax calls for the institution of a small tax of less than half of one percent on Wall Street transactions in order to generate many billions of dollars each year toward crucial public goods and services, like healthcare, education, and helping the world’s poor confront the climate crisis.

Andrew Bacevich’s Letter to Paul Wolfowitz at Harper’s has been generating significant attention. Bachevich reminds us that Wolfowitz was a protégé of nuclear strategist Albert Wohlstetter, who believed states should act to prevent war, not just react to aggression. At one point, Bacevich writes

So even conceding a hat tip to Albert Wohlstetter, the Bush Doctrine was largely your handiwork. The urgency of invading Iraq stemmed from the need to validate that doctrine before the window of opportunity closed. What made it necessary to act immediately was not Saddam’s purported WMD program. It was not his nearly nonexistent links to Al Qaeda. It was certainly not the way he abused his own people. No, what drove events was the imperative of claiming for the United States prerogatives allowed no other nation.

… to unshackle American power. Saddam Hussein’s demise would serve as an object lesson for all: Here’s what we can do. Here’s what we will do.

Government officials from an elite group of developed countries meeting in Washington DC appear to be on the brink of instigating yet another big bank giveaway, this time in the name of fighting climate change.

If it follows a recently leaked agenda, the meeting will focus on using capital markets to raise money for climate finance. The goal is to fill the void left by the United States and other developed nations that have failed to meet their legal obligations to deliver funding to poorer countries for climate programs.

In this corporate-oriented approach, countries would provide generous loan guarantees and export subsidies that sweeten investments for private firms and give them the chance to net big profits while leaving governments (and the taxpayers they represent) to cover the losses if investors’ bets don’t pay off. Wealthy countries would then be able to claim that they had moved billions of dollars of new climate investments.

Unfortunately, the projects best placed to benefit from large-scale private investment and market mechanisms—like mega-infrastructure projects and fossil fuel-powered ventures that hide behind a “low-carbon” label—are likely to be those that have fewest sustainable development benefits. In many cases, the funding will channel windfall profits to corporations that would have invested profitably even without these new channels of support.

The sad fact is that this has happened before. Nations spent five years negotiating the Kyoto Protocol—the only multilateral treaty to regulate emissions of greenhouse gasses and spell out binding targets for reducing climate pollution. But before the treaty was finalized in 1997, the United States led a push to replace the enforcement mechanism—a fine for missing reduction targets paid into a clean development fund—with a market mechanism meant to lower the cost of compliance for polluting companies. The accompanying clean development mechanism (CDM) was born so that companies in the industrialized world could purchase ultra-cheap carbon pollution credits from developing nations to offset their continued pollution at home.

In the end the United States pulled out of the Kyoto treaty. But by shifting a global regulatory regime into a market-based regime centered on enticing private-sector investment with promises of profitability, Washington left its mark.

A decade and half later, carbon markets have collapsed, developing countries are awash with carbon credits for which there is no demand, and the planet keeps getting warmer.

Meanwhile, the clean development mechanism has led to private sector investment in spurious projects like mega-hydropower dams and coal-fired power plants that have delivered little in the way of sustainable development outcomes—and in some cases have further harmed the environment and human health.

Passing the Buck

And now Washington is at it again, hijacking the debate about how to support the global transition to a low-carbon, climate-resilient economy—and keeping the public, the press, and even developing countries out of the conversation. They’re repeating the same tired story that rich governments are broke and thus have to call in the private sector to finance climate change solutions.

In today’s economy, mobilizing private finance means going to the capital markets to raise money. But relying on financial markets for funding to support renewable, clean energy or to resettle climate refugees would subordinate climate action to the speculative whims of bankers.

Governments in the developed world shouldn’t pass the buck to the private sector. They must act now. They can start by cutting subsidies for fossil fuels, including for natural gas “fracking” in the United States, and set binding regulation for reducing climate change pollution. Then governments can adopt innovative ways to raise public money, like taxing pollution from shipping or financial transactions. Indeed, even a very low financial transactions tax would generate substantial revenue and deleverage capital markets.

And of course, if there is any hope of creating a new paradigm of climate-sound development, there will have to be a role for the private sector. But the micro, small, and medium enterprises of the developing world would be preferable partners to the multinational firms that have been responsible for sucking wealth and resources out of countries for decades, leaving pollution and poverty in their wake.

At some point—and for the sake of the future generations who will bear the results of our decisions, we hope it’s sooner rather than later—the government officials who place their bets on private finance will have to learn that putting corporate profits over the needs of climate-impacted people is a risk the rest of us are not willing to take.

Antonio Tricarico is director of the New Public Finance program of the Italian organization Re:Common based in Rome and a former economic correspondent at the Italian newspaper Il Manifesto.

Janet Redman is the co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies in Washington, DC.

Editorial support by Peter Certo and Oscar Reyes of the Institute for Policy Studies.

North Korea’s bellicose rhetoric of late has certainly set the international community on edge—and nowhere more so than in the U.S. and South Korea, the primary targets of such threats.

Coming after a long-range missile test in December and an underground nuclear test in February which drew international condemnation and provoked a new round of tough sanctions from the U.N., North Korea’s escalating provocations have been toeing a very delicate line between theatre and reality.

Since the U.N.’s February sanctions—which largely targeted North Korea’s elite by further restricting luxury imports—North Korea has been particularly busy in provoking the international community: it has threatened the U.S. with a preemptive nuclear strike, nullified the 1953 Korean armistice, allegedly launched cyberattacks against South Korea, announced plans to restart its Yongbyon nuclear reactor, severed all of its communication lines with South Korea, and rather overtly moved mid-range missiles to its Eastern coast.

Of particular concern, North Korea—after turning away South Korean workers from the jointly-run Kaesong Industrial Complex only a few days before—has most recently announced that it is withdrawing its some 53,000 workers from the complex and will consider shutting down the operation entirely.

The Kaesong complex, a manufacturing zone just north of the Demilitarized Zone between North and South Korea, has been run jointly by both North and South Koreans since 2004. It provides the North with an estimated $90 million each year—from workers’ wages—which Pyongyang collects and instead pays workers with local money. Even though the state reaps most of the benefits of the complex, Kaesong still provides a vital source of income for impoverished North Korean workers: at least one in six of the inhabitants of the nearby city Kaesong work at the complex and depend upon such steady income. Kaesong is a boon for South Korea as well, since North Korean factory workers there earn “less than one-tenth” of the wage of average South Korean factory workers.

The stability of the Kaesong operation is considered to be a bellwether for the state of affairs between North and South Korea: as of now, it is something of a last remaining symbol of North and South Korean cooperation. North Korea’s current withdrawal is only a temporary suspension on the complex—something that has happened in the past when North and South Korean tensions have run high.

It would be an unprecedented move, however, if North Korea acts on its threats to permanently close the facility. And Kaesong’s closing would not only harm workers from both the North and South: it would signal, according to the Wall Street Journal, “a heightened risk of conflict since it’s a step North Korea has never taken before” to South Korea and its allies.

Leslie Garvey is a contributor to Foreign Policy in Focus and Focal Points.

This week in OtherWords, David Elliot highlights some of the hidden costs of the nation’s supersized military might and Raul A. Reyes applauds the Associated Press style book update that may herald the end of “illegal” people in the mainstream media. If you’re an editor still seeking Tax Day pieces to run over the weekend or next Monday, be sure to take another look at last week’s special edition and to check out Sam Pizzigati’s latest column.

OtherWords intern Alana Baum is nearing the end of her spring term with us. She has done an outstanding job from the moment she arrived. We are now seeking new interns who can join our team in 2013. Ideal candidates are progressive news junkies and wordsmiths who are either based in the Washington, D.C. region or close enough to commute once or twice a week for their first month. Information about what’s involved and how to apply can be found at the bottom our About page. Please help spread the word.

Prisoners in Israel’s Ramon Prison recently rose up in protest for fellow inmate Maisara Abu Hamdiyeh, who died of throat cancer on April 2. Attributing his death to a late diagnosis and improper medical treatment, protesters are also being heard throughout Gaza, Jerusalem, and the West Bank.

Hamdiyeh originally complained of throat pain in August of 2012 and in January was diagnosed with esophageal cancer. It is unclear what sort of medical treatment, if any, he had been receiving up until his death, and reports from each side vary. Palestinians claim medical negligence, while Israelis say that adequate medical treatment was provided.

Following the announcement of Hamdiyeh’s death, prison protests prompted Israeli guards to fire tear gas on inmates in their cells—who were only guilty of “banging on their cell doors and throwing objects around” according to the BBC. This appeared to backfire however, as six guards along with three inmates were sent to the prison clinic after the teargas was used.

In solidarity with prisoners, Palestinian citizens took to the streets in protest. In Hamdiyeh’s hometown of Hebron demonstrators threw rocks at Israeli soldiers, who retaliated by launching tear gas canisters and firing rubber-coated bullets into the crowd.

Maisara Abu Hamdiyeh is the second prisoner in as many months who has died in Israeli custody, after torture victim Arafat Jaradat. Israel continues to show blatant disregard in addressing basic needs of Palestinians in the prison system, significantly increasing tensions in this already polarized society.

Cross-posted from JohnFeffer.com. John is currently traveling in Eastern Europe and observing its transformations since 1989.

Oleg Chulev

Poland was unique in East-Central Europe for the size, strength, and pivotal role of its labor movement, Solidarity. In no other country in the region did workers take the lead in challenging the communist system. But that doesn’t mean that worker movements were not important in other East-Central European countries. In Bulgaria, for instance, Podkrepa was a key part of the opposition representing workers’ voices.

From the word “support” in Bulgarian, Podkrepa had its start in February 1989, before the spike in popular revolt. Later, as change accelerated in the country, it was a founding member of the opposition coalition known as the Union of Democratic Forces (UDF). Through “citizens committees,” Podkrepa campaigned on behalf of the UDF in the first free elections in 1990. By 1991, and the election of the first non-socialist government, Podkrepa formally withdrew from the UDF.

But those were challenging years for trade unions affiliated with the political opposition. There were fierce debates within the union over whether to be involved in formal politics. When opposition parties supported economic reforms that adversely affected workers, these debates became even more heated.

“We made the same mistake as Solidarity,” Oleg Chulev told me. “We participated in governments. I was the head of the national employment service for four years: at the time when the unemployment rate ranged around 18-19 percent. This led to shrinking membership. And the repressions at the enterprise level pushed a lot of people away.”

I met Oleg Chulev of Podkrepa back in 1990, when it was a relatively young organization. Since then he has continued to work with the union and has also participated in government, heading up the national employment office.

Our conversation focused on what workers have gained and lossed in Bulgaria over the last couple decades. “The hired labor force now has the freedom to choose what to study, where to study, what to work, where to work,” he told me. “They have the freedom to move. But this comes with a price.”

That price can be measured in different ways: “If you consider the standard of living in Bulgaria now and back then, you’ll see that people live better now. They have a higher standard of living. But there was no unemployment back then. There was so-called artificial employment for all. Now, the GINI coefficient can be felt by the man on the street even if he doesn’t know what this coefficient is. The gap between the rich and poor is much higher now in material terms than the gap between the nomenklatura and rank and file was back then. The insolence of the new rich is no way smaller than the insolence of the party nomenklatura was back then.”

Our conversation ranged from how economic reform could have been done differently in Bulgaria and the failure to create a Labor Party to labor-market policies and the impact of the European Union on the Bulgarian economy.

The Interview

Do you remember where you were when you heard the news of the fall of the Berlin Wall and what you thought about it?

It was the evening, and I was sitting with friends at home. And it was a big joy. But it wasn’t as unexpected as one might think. It was just a matter of time. It was already happening in our minds. We used to say that Gorbachev shouldn’t stop. But even if he did, he would only delay this process.

When did you first become involved with Podkrepa?

It was in the spring of 1989. I got in touch by phone. There was no other way to get in contact at that point. My affiliation with Podkrepa back then was personal: signing the declaration of support of Podkrepa. I joined the organization in October 1989 when we started meeting with people from other cities in Sofia. This is when we founded the teachers’ trade union as well. In November, we officially founded it, at a press conference.

You’ve been affiliated ever since?

Yes, since the beginning of October in 1989.

It is often said that the people who lost the most during the transition are workers. Do you think that’s the case?

Yes, if by workers, you also mean not just blue-collar workers but also teachers and clerks. They were lied to. Of course, they didn’t have much to lose. They lost the illusion of security, the illusion of equality. Materially, they are not worse off now. But they lost the feeling that they could do the same job in the same place for the rest of their lives. They lost the feeling that if they were qualified for a job, they could always have that job.

They also lost security in real terms. If you consider the standard of living in Bulgaria now and back then, you’ll see that people live better now. They have a higher standard of living. But there was no unemployment back then. There was so-called artificial employment for all. Now, the GINI coefficient can be felt by the man on the street even if he doesn’t know what this coefficient is. The gap between the rich and poor is much higher now in material terms than the gap between the nomenklatura and rank and file was back then. The insolence of the new rich is no way smaller than the insolence of the party nomenklatura was back then.

However, when one loses, one gains too. We often don’t know what we gain when we lose. The hired labor force now has the freedom to choose what to study, where to study, what to work, where to work. They have the freedom to move. But this comes with a price.

Are there any things you would have done differently from a trade union point of view?

Plenty of things, starting first of all, with the privatization process. Privatization was carried out unfairly. Well, fairness and unfairness are emotional characterizations. Let’s say, rather, that it was non-transparent. The winning bidders were known in advance. Enterprises were not sold so that the factories could continue working. Rather, the new owners cashed in the mortgages and took the money. There were no safeguards to preserve the workplace and the jobs.

There are so many examples. There was the sale of the national refinery to Russia’s Lukoil, which made Bulgaria dependent on this company. There was the sale of the Bulgarian national carrier, Balkan Airlines, which went bankrupt after its purchase. With the privatization of mines and metallurgical companies, the new owners, instead of modernizing manufacturing and making it more environmentally correct, squeezed out as much money as possible and then went bankrupt.

This all resulted in structural unemployment. The government kept giving bonuses to employers through tax benefits and by reducing the insurance contribution rates. They ended up creating the so-called bad debt millionaires by providing them with a state guarantee. These bonuses given to the employers didn’t go to creating jobs or higher salaries. Over the last 7-10 years, businesses failed to pay $10 billion in taxes. And instead of raising salaries, they bought yachts and Bentleys.

Plenty of things could have been done differently. The fact that we were half a trade union, half a political organization: now I can say that this was a mistake. Back then, however, this may have been necessary. Together with Fratia in Romania, we were the first two trade unions after Solidarity. Fratia consolidated with the former government trade union and lost influence in society. And now there are other strong players in Romania. Despite the errors that we recognize now in our political commitments, Podkrepa managed to preserve its influence.

Only very late did we learn the lesson that it’s not so important who is in power but how they exercise this power. Currently the members of Podkrepa do not vote for socialist parties and will not vote for the Bulgarian Socialist Party (BSP). But if we consider the economic claims of Podkrepa, they are much further to the left than the Socialists. It can’t be otherwise. The Socialists evolved in a weird way. The Socialist Prime Minister Sergei Stanishev, who is now the chairman of the European Socialists, introduced the flat tax in Bulgaria, something that two right-wing governments didn’t dare to do. This party, in other words, was protecting the interests of big capital. One third of the members of the BSP Executive Board, the leaders, are millionaires!

One of our mistakes during the transition was that we did not consider setting up a Labor Party. Until the mid-1990s, we identified ourselves with the party of the right wing, the Union of Democratic Forces (UDF). But within this right-wing coalition was Petar Diertliev of the Social Democrats, the Agrarian Party, and the Green Party. It was a political mistake for the UDF not to have specified its identity. Initially, it filled the whole political spectrum. It shouldn’t have identified itself as the right wing, leaving the whole left to the former communist party.

But you were in a common predicament. The former Communist Party in Poland instituted austerity communism. And Solidarity initially supported shock therapy. You may have made a political mistake, but it was not a unique political mistake.

I’m not a believer in global conspiracy theories. I don’t think anyone predetermined that these mistakes would happen. Perhaps this was just the logic of development.

Is it too late to establish a Labor Party?

Sooner or later it will spring up. But our members believe that this isn’t our business. They do not trust politicians, regardless of their party. It’s not just our members. This mistrust has resulted in a tsar being elected prime minster, which was basically a rejection of political parties. Later, after the unsuccessful mandate of the BSP, this mistrust in parties resulted in the current prime minster coming to power. He set up a party five minutes before the elections, just because he needed it for the registration. Basically, a person who doesn’t respect any parties won the elections. But this can’t go on. If voters are not swayed by extremists, such a party will eventually come into being. And then it will be natural for the two trade unions to support it. But if we invest efforts in political activities, people will not trust us.

I remember at the beginning of the transition here, Jim Baker of the AFL-CIO came to Bulgaria. He told us off the record that political democracy is beautiful but it ends at the threshold of private companies. We had no idea what private property meant back then. We had so much to do in the field of industrial democracy. We are still not on equal footing with employers. They have their own powerful representatives. Many years ago, you and I talked about the trade union lobby in parliament. Now almost all MPs belong to the lobby of capital.

When populist parties here, like Ataka, talk about economic issues, they sound left wing in their criticism of big capital and globalization.

This is why I said that if they don’t shift to extremes, people would support a Labor Party. But poverty is the problem. When the poor are marginalized, they become the social base for both right-wing and left-wing extremists, including nationalists. It’s easier to put the blame on the Gypsies, on the Jews — on the Martians, if you like! — rather than admit that you must take your life into your own hands.

Podkrepa now cooperates quite well with the former official trade union CITUB.

For 10 years now. In general, we do not have different paths though we have two different headquarters. But we do compete as rivals within enterprises. We compete for workers: who will offer more, who will do more. Usually, our demands are stronger. Maybe they are better negotiators; maybe we are better in action. For instance, during the railway strike of a year ago, their leaders were more in the front. But 75 percent of the strikers were ours. They waved the flags.

But there are two trade unions in Bulgaria, that’s a fact. They are the larger trade union. The time when Podkrepa was growing is over. We made the same mistake as Solidarity. We participated in governments. I was the head of the national employment service for four years: at the time when the unemployment rate ranged around 18-19 percent. This led to shrinking membership. And the repressions at the enterprise level pushed a lot of people away.

We do not have the financial resources that CITUB has. I’m the head of the Institute for Social and Economic Trade Union Research here at Podkrepa. Our institute doesn’t have permanent staff. It works ad hoc. The mirror institute of CITUB, meanwhile, has 15-16 staff. Nevertheless we are rivals. Our people keep working because of an idea. They do this for minimum pay. They work elsewhere and come here to support Podkrepa. I suppose that this is what holds us together: the idea.

At the same time, we developed a network of service not only for our members but for all workers. We provide legal counseling free of charge as well as assistance on labor market and assistance for professional retraining, We’ve finally been able to grow our youth network. This is very important because the workforce is aging in Bulgaria. The young people entering the labor market are more individualistic. They don’t care about trade unions. And the fact that this youth network is developing is very satisfying.

Have you had second thoughts about your four years as the head of the national employment office?

Yes. After the economic crisis of 1996-97, the situation here was terrible. The closing of workplaces was accompanied by hyperinflation: this was a huge challenge. The right-wing expert government of Stefan Sofiyansky and the right-wing government that followed of Ivan Kostov invited two trade unionists to serve: the minister of labor Ivan Neykov from CITUB and I was from Podkrepa. The national employment office at the time was not a government agency. It was a public employment agency. It had a tripartite governance. We had advisors from the U.S. Department of Labor and support from USAID for institution-building and capacity building. And I think that this reform was good. Personally, it was difficult. I had to work 10-12 hours a day. Everybody did.

At that time, we introduced labor-market policies that exist everywhere but were new for Bulgaria. And I think with scarce funding we managed to stabilize the situation. We also managed to preserve the social peace or, at least, we prevented the unemployment rate from exploding.

I now hold an expert position at Podkrepa. I provide expertise to the leaders of Podkrepa particularly on the issue of labor markets. And I represent Podkrepa in the national council for employment.

Does Bulgaria have a social safety net that is sufficient, comparable to safety nets in the region? And has the EU been helpful on this?

My reply to this is in the form of a question. Is there a European social model? Is there a social Europe?

We have the poor South and the rich North here in Europe. The difference between our standard of living and the European standard of living is huge. But there is also the difference between Spain and Portugal on the one hand and Netherlands and Sweden on the other. I’m talking here not about the phenomenon of migration but internal European mobility whereby a qualified labor force from Spain, Portugal, and Italy goes northward and we Bulgarians take their places. They engage in social dumping in the north, and we do the same in their countries. It’s quite doubtful, of course, that the Spanish will ever receive Swedish pensions or that our workers will receive Spanish pensions.

The institutions of a social safety net are there. They are more or less working. The problem, however, boils down to people’s incomes, because contribution rates are dependent on income. We have a 10 percent flat tax rate here in Bulgaria, which is unique in Europe. If I get $1000 dollars, I pay $100. Bulgarian pension system faces two problems. The first is stability. It depends on the income. The second is adequacy. Pensions fail to replace income, regardless of the European level. Health insurance fails to cover adequate services. The current government is very much concerned about stability and security, but they don’t care about adequacy.

I can give you an example. Every worker pays health and pension insurance contribution. The military, police, and civil servants, however, do not pay: the government transfers their contributions to the insurance system out of the taxes of the same employees. I’m not going to refer to this as honest and fair. It’s illogical! I said my score was 4 for the social sector. Because the institutions are in place and largely corruption-free. The sector isn’t corrupt because it doesn’t generate profits. It operates at a deficit.

My forecast for the future, however, is not very positive. Employment remains low. In its 2020 Strategy, the government set as a goal an employment coefficient of 75-76. This is the proportion of the workforce that has a job. The Europe-wide coefficient is 72. The Bulgarian government’s goal is too ambitious. Right now we are about 50! Maybe they are expecting that the next government or the government after that will achieve this goal. Brussels requires many papers to be submitted: a national strategy on this, a national program on that. We are excellent at delivering these papers. But this particular one is really a non-paper.

One policy the government takes pride in is the retention of young people. Emigration has dropped. But this is because the jobs in Europe have decreased. Our efforts should not be to convince people to stay rather than emigrate but to convince the government and the employers to increase remuneration. The average productivity of labor in Bulgaria is 43 percent of the European average and the average income is 30 percent below the average. For over 10 years, remuneration has been lagging behind productivity. In the last couple years it has gone slightly ahead of productivity. But there’s a lot to do. Our job is to fight employers at the negotiation table. Our job is to be the red light in society and to tell capital that, when there’s a crisis, it’s better to negotiate with us in order to avoid social explosions. However, the appetite of capital is insatiable.

You see what happened in Europe. When the Berlin Wall was still in place, Europe was a symbol for us: something to look up to, a colorful shop window. Workers from France and Germany came here on holidays, with loads of money. Back home they had lots of rights. They had strong trade unions. They were highly respected. That showed the advantages of capitalism. After the Berlin Wall fell, we witnessed, I won’t call it exploitation, but the intensification of labor. In the years after the Berlin Wall fell, especially lately, Western Europe was shaken by protests and strikes that it had not seen since the 1960s. It’s still going on. This is why Cyprus elected a communist president and Greece all but did as well.

Where do you think there is the greatest potential for growth in trade union membership? Are there barriers to organizing new members imposed by the government or by international circumstances? We have for instance Right to Work laws in the United States.

Something similar is attempted in Bulgaria in terms of an effort to limit collective bargaining. The Civil Service Act deprived civil servants of the right to become members of trade unions. Traditionally, trade unions were very strong in this sector. Now they have no right to collective bargaining. They have no right to strike. We lost a lot here. If this law is not amended, we won’t be able to organize in this sector.

As for prospects, that’s where the greatest obstacles lie, for instance in the banking sector. There’s not a single bank with a trade union. In the high-tech sector also there are many challenges. At the beginning of this year, we set up a chapter in a mobile operator called M-Tel (Mobitel). Young people were working there, average age of 25, with good education and language proficiency. They are confident that they are working at a good company, and they receive handsome salaries. When hired by a bank or a high-tech firm, new employees sign declaration that they voluntarily don’t want to be part of a trade union. This refusal of labor rights has no significance. But the human resources managers often refer to this declaration.

In any case, four times we tried to set up an organization within M-Tel. And four times they fired the initiators. Two years ago, the fired employees won their case in court and were restored to work. M-Tel said that it was cheaper to pay out 100,000 Euro in judicial costs and compensation rather than allow a trade union in the company. The owner was a Russian mafia guy, Mikhail Cherny, who was subsequently ousted from the firm. But we suspect that he continues to be in charge through an offshore company.

This last time, we worked underground for 6 months at M-Tel until we had 250 people. And only then did we announce the existence of the union. The managers couldn’t deal with that. But the first union was set up in the call center and in the headquarters, where they do technical support for software. It those workers were dismissed, the company would collapse. Even if they go on strike, it will be detrimental to the company. So, there is potential. It’s a matter of strategy.

One of our big allies is the anti-trade union policy. Currently, we have temporary work agencies. The companies dismiss people that have permanent contracts and hire people from these agencies at half-salaries. The notorious EU directive on Flexibility and Security in the Labor Market is all about the growth of temporary agencies, part-time workers, distance workers, and so on. In Bulgaria, this means flexibility for workers — they must be very mobile, be willing to work flexible hours — and security is only for capital.

The response to this is to make people organize. I’m observing this organizing within M-Tel. They have developed their own tactics. They are scattered around the country. They communicate by Internet. They set up meetings over the Net. New members are admitted online. This has never been done here before. One of the tasks of our institute is to observe this tactic and see the results and propose it for organizing at other companies.

The EU once represented something positive, not just for Bulgarians, but in terms of harmonizing up social welfare standards, labor standards. But more recently it seems that the EU is driven more by banks and finance. Flexibility is definitely part of that. But do you see a possibility of EU institutions strengthening trade unions or leading to the overall improvement of working conditions and compensation?

Yes. The problems that Europe faces are not unique to Europe. They are part of globalization. Workplaces were shifted to China, not only from Europe but from the United States as well. The knowledge-based economy was deployed on such a minor scale that it never was able to create new jobs to replace industrial employment.

The response to globalization is a mirror image. Trade unions have responded by unifying on a large scale. Six European trade unions in metallurgy, transportation and mines became one big union. All public sector unions – teachers and so on — united into the European Public Service Union. This response gives us more possibilities.

When we organized a strike at a Turkish company in the Bulgarian city of Targovishte, which privatized a glass factory, it was a 60-day strike. We were supported by the Turkish trade union, because they had 7,000 members in that sector, as well as the European glass factory trade union members.

Has there been cooperation among trade unions within Eastern Europe?

Yes. Interestingly, the former relations are preserved. For instance, Podkrepa maintains close relations with Solidarity. CITUB is closer to OPZZ. There is some sentimental value to these relationships. So, certain strong relations were established in the past, and they are still in place. However, some of the trade unions that we partnered with in the past are no longer influential, like Liga in Hungary, which is very very small, or Fratia in Romania.

Are there joint projects? Around organizing in companies that have enterprises in both countries?

Yes, and we use European money for joint projects and cross-border programs. It’s always best to have a Western partner so that there’s a transfer in knowhow and innovation. Some time ago, I visited Barcelona. With a trade union in Catalonia and with Polish partners, we introduced knowhow for career counseling. Up to now this service was not offered by unions in Bulgaria. We trained 70 people who will be offering this service all over the country.

This knowhow didn’t exist in Spain, Poland, or Bulgaria. The transfer of this knowhow originated in Austria. This was not a major project in terms of funding. The training, localization of materials, and translation came out to 60,000 Euro — 20,000 Euro per country – and it lasted a year. It’s a wonderful project because it provides people with a free service that would otherwise be very expensive on the market.

Do you see any prospects of “wild capitalism” being any less wild in the future?

No. It hasn’t become milder. Perhaps only a little bit more civilized. What can stop capitalism from becoming wilder is the recognition that greed may lead to social explosion. There’s the example of Greece. You don’t think that the deficit resulted from the fact that the Greek workers and pensioners simply ate this money. Money was wasted, and the budget crisis is the result of the actions of politicians and big capital. But the price will be paid by the workers and pensioners. And when they can’t pay, they go onto the street and you see what is happening there. This won’t threaten European institutions. But it can serve as a very bad example.

I saw two rallies in Barcelona in two days. One was for the independence of Catalonia. And the second was against the austerity measures. Both of these rallies were very strong. And there were Greek flags waving there.

So, there are areas in which we perform well and we can give a high score. No matter how unproductive our elections might be, we have political freedom. The right to choose is amazing. We also have the right to travel, the right to information.

I have contact with our colleagues in Russia and Ukraine. When I tell my son that they restrict the Internet over there, I think that he’s happy that he lives in Bulgaria rather than in Russia or Ukraine.

When you look back to 1989 and what has changed or not changed since then, how would you evaluate the situation in Bulgaria over that time, with 1 being most dissatisfied and 10 being most satisfied?

4. Because 40 percent of things are done.

The same period of time and the same spectrum, how do you feel about your own personal life?

6

Looking into the near future, how do you feel about the prospects for Bulgaria over the next few years?